US Services PMI dropped from multi-year highs to a still expanding 58.5, 3 month lows and the biggest MoM drop in 6 months. This is the 10th month of expansion in a row but employment growth continues to slow, as opposed to the priced-in escape velocity to the moon levels the market expects, even if this particular piece of bad news may just be the good news the "market" needs for that nudge above 2,000.
Another way of seeing it:
As Markit notes
Adjusted for seasonal influences, the Markit Flash U.S. Composite PMI Output Index dipped from 60.6 in July to 58.8 in August, its lowest reading for three months. Slower overall output growth largely reflected a moderation in the service sector, as manufacturing production expanded at a similarly sharp pace to that seen in July. Meanwhile, latest data pointed to a solid increase in private sector payroll numbers, but the rate of employment growth remained weaker than June’s post-crisis peak.
And some comments from Markit's Tim Moore:
“The U.S. service sector continues to enjoy a strong growth phase, but the latest survey suggests the recovery has lost some momentum since hitting a post-crisis peak in June. Output expanded at the slowest pace for three months in August, while new business growth picked up only slightly from July’s recent low.
“Despite a modest growth setback in August, the survey remains consistent with a relatively strong GDP outturn in the third quarter of the year, following the 4% annualized expansion seen during the second quarter.
“Survey respondents cited improving demand patterns among both households and businesses, which in turn supported another month of rising payroll numbers in August. Moreover, service providers reported a solid rebound in their confidence towards the business outlook, which if sustained should feed through to firmer labour market conditions over the months ahead.”
Or, it may not feed through to the labor market as it hasn't for the past 6 years, however the Fed's $4.4 trillion balance sheet has certainly fed through to the S&P 2,000.
In other words, completely irrelevant to a market that today has made up its mind that the global economy is bad enough to justify more ECB, and maybe BOJ, easing any minute now.